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Areas in Spain to visit?

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I'm planning two weeks in Spain in August 2015 with my partner and two daughters (the girls will be 9 and 14). Having learned from overdoing it on our last Europe visit, I'm seeking a balance of down time and sightseeing. I'm thinking we'll spend a couple of days exploring the urban area we fly into (Madrid seems to have good airfares from Chicago, but family members want to go to Barcelona). Then go to a rented house or apartment (with a pool, if we can afford it), where we can all sleep late and relax, and go on short trips in the surrounding area when we've had enough of sleeping late and swimming. Here are my questions:
1) Madrid or Barcelona, if I have to choose one?
2) Is there an area I should aim for, for the second part of the trip, which we can use as a place for relaxing and a home base for interesting sightseeing? I'm hoping to find a house or apartment in a town where we can go for walks, shop for our food at a local market, and relax. Also a place that is close enough to interesting things so we can see them on day trips. Will it be necessary to rent a car for this second phase of the trip?
I've never been to Spain, and I've started looking at postings and travel guides, but I'm lost because I don't yet know what areas to focus on. Any advice would be appreciated.
Thank you!

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